Being smart about Smart Cities Mission

Being smart about Smart Cities Mission

Any attempt to improve our cities depends on how data are compiled and shared

The Centre would like us to believe that the Smart Cities Mission will transform urban life in the agglomerations that enter the elite club. With the latest inclusions, there are 90 cities in the list, each of which proposes to turn ‘smart’, utilising core funding from the Centre and other resources. By all accounts, the provision of basic services in urban India has been worsening, and this is clearly reflected in the winning city proposals: 81 of the selected plans seek funds for affordable housing, new schools and hospitals, and redesign of roads. This is at best a partial list, and there are many more aspects to achieving inclusivity. There is a high-visibility campaign around the Smart Cities Mission, but there is little evidence to suggest that State and local governments have either the fine-grained data or the capability to analyse them in order to understand the evolving needs of their communities. The Centre has apparently decided to skirt such a fundamental problem by adopting a ‘managed urbanisation’ approach in the chosen cities, with the powers of municipal councils delegated to a Special Purpose Vehicle (SPV), under the Companies Act, that will act in its own wisdom. Given that this is the model adopted by the two-year-old Mission, the Centre must present a status report on what the SPVs have achieved so far.

Any serious attempt at improving the quality of life in cities would depend on how governments approach data. It would be smart, for instance, to use sensors to estimate the flow of vehicles and pedestrians, and create smartphone applications for the public to report on a variety of parameters. Making such data open would enable citizens’ groups to themselves come up with analyses to help city administrators make decisions, boost transparency and make officials accountable. There are several international examples now, such as the Array of Things sensors being installed on Chicago streets, which let people download the raw data on air quality, transport, pedestrian movement and standing water. Although India’s Smart Cities Mission has identified more than 20 priority areas, interventions by the respective agencies are weak. Access to special funding should make it mandatory for all public transport providers — city bus corporations, Metro Rail and suburban trains — to provide real-time passenger information in the form of open data, an inexpensive global standard that raises both access and efficiency through smartphone applications. Making street-level waste management data public would lead to a heat map of the worst sites, compelling managers to solve the problem. Clearly, there is a lot of low-hanging fruit on the road to smartness, and a nimble policy approach can tap this quickly. More importantly, the ideology that guides the plan should recognise that the vibrant life of cities depends on variety and enabling environments, rather than a mere technology-led vision. Pollution-free commons, walkability and easy mobility, with a base of reliable civic services, is the smart way to go.

Who’s afraid of neutrinos?

Who’s afraid of neutrinos?

The India-based Neutrino Observatory would greatly advance scientific research

Which one of us would not have applauded Galileo in January of 1610 when he trained his telescope for the first time on Jupiter and observed four dots alongside it? Within days he noticed that the dots seemed to be going around Jupiter... they were its four largest moons!

Today, very large telescopes send us iconic images of distant galaxies and of faint remnants of the light produced by the Big Bang. The light from the moons of Jupiter was always falling on earth. It took a telescope to detect it because it was so feeble and could not be seen with the naked eye. Interesting things, telescopes. They observe something that is already there. They do not produce what they observe.

Just like light

There are two other things that, like light, can travel great distances in the universe, and therefore can be usefully observed. The first of these are gravitational waves. Predicted by Einstein’s famous theory, these waves travel at the speed of light and are produced when very heavy objects such as black holes collide. Gravitational waves were first detected in September 2015 by the Laser Interferometer Gravitational-Wave Observatory (LIGO). As the waves passed, LIGO measured that they expanded and contracted the earth a tiny bit for a fraction of a second. The measurement told us that the colliding black holes were 30 times the mass of the sun, 1.3 billion light years away, and during the collision, the mass of three suns just vanished to produce the energy of the gravity wave that spread across the universe. However, LIGO did not produce the waves that it observed.

They were produced by cataclysmic events, and we wouldn’t want to be anywhere near them, but observing them through LIGO is like receiving a postcard from that collapsing, tragic part of the universe that even light cannot escape from.

The only other particles that can zip through the universe at speeds very close to that of light are called neutrinos. The biggest nuclear reactor that most life on earth derives energy from is the sun. Like all nuclear reactors, in addition to giving out energy (heat and light), the sun also emits neutrinos. We have all seen sunlight. Can we also observe the billions of neutrinos the sun emits every second?

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In the mid-1960s, when solar neutrinos were observed through the first neutrino telescopes, it quietly unleashed one of the biggest revolutions in our knowledge of the laws of physics that govern the universe. Raymond Davis and John Bahcall detected that only half the neutrinos that the sun was emitting towards the earth were actually reaching us.

The reason? As they travelled the distance from the sun to the earth, the neutrinos were changing from electron-neutrino type that the sun was emitting to muon-neutrino type, and thus escaping detection. All the laws and forces of nature that we know of, other than gravitation, are described by what physicists call the Standard Model. It predicted that neutrinos, which come under three types or flavours — tau-neutrino, electron-neutrino and muon-neutrino — would not oscillate from one flavour to another. The discovery that they do meant that the Standard Model or the basic laws of physics had to be further modified. Thus, through the neutrino detectors we are actually observing the fundamental laws of physics at the cutting edge.

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The proposed India-based Neutrino Observatory (INO) aims to observe muon neutrinos that are continuously produced in the atmosphere when cosmic rays strike the earth. Since every type of matter particle has an anti-matter partner particle associated with it, there are also anti-neutrinos that the INO can observe. Anti-neutrinos also come in three flavours and can oscillate from one to the other. An important question in the mystery of trying to piece together the laws of physics is: do anti-neutrinos oscillate or flip their flavours at exactly the same rate as neutrinos do, or are there slight differences in their rates? In other words, do laws of physics treat matter and anti-matter exactly the same way as far as the neutrinos are concerned or do they treat them differently?

While the INO will not by itself provide an answer to this question, its measurements will — by determining the order of the neutrino masses and thereby help other neutrino experiments that are already under way or being built in other parts of the world. The INO, by observing the rates at which neutrinos and anti-neutrinos oscillate, will make a substantial contribution to the quest to unravel the secrets of the ultimate laws of physics.

Nothing to fear

Unfortunately, some activists and political parties in Tamil Nadu have made baseless allegations that the INO, which is just like a telescope, causes radioactivity and have compared it with the dangers of having a nuclear power plant or radioactive material in the neighbourhood. This cannot be true since the neutrinos, whether they are naturally occurring in the atmosphere or from the sun, or are emitted by far away man made nuclear reactors and sent in beams of neutrinos with few GeV energy, are very feeble and weakly interacting particles that we can’t even see or feel without the help of an observatory. Beams of neutrinos are being sent to the NOvA neutrino detector in the U.S. and to the T2K neutrino detector in Japan every day. Moreover, being the lightest matter particles, the neutrinos do not decay into any other particles, as everything else is heavier — so they are not like uranium which decays radioactively into smaller atoms. All the INO would do is to provide the lens to observe neutrinos as they are too feeble or faint to be detected by the naked eye. It does not create a radiation hazard or put us in harm’s way. While we should ensure that the tunnel is dug with proper environmental safeguards and the project has various clearances, raising the spectacle of radiation hazards and comparing it with nuclear or thermal power plants is spreading false fears and is unscientific.

Pressurised Heavy Water Reactor

Pressurised Heavy Water Reactor

It will meet country’s demand for Clean Energy in the immediate and the long-term future

Government’s announcement for the plan of construction of ten new Pressurised Heavy Water Reactors (PHWR) of 700 MWe capacity vindicates the confidence in the indigenous PHWR technology which has been built over a period of nearly four decades. The performance of the present sixteen indigenously built PHWRs is demonstrated by an average capacity factor of about 80% over last five years, their uninterrupted operation over extended periods, the longest being 765 days for a Rajasthan Reactor, RAPS-5 securing the second world ranking and a very low average electricity tariff which is next to that of the hydroelectric power. More than anything else, is the fact that 100% of all their components are manufactured by the Indian industry. Dr. M.R.Srinivasan in a recent column in The Hindu (appeared on May 19,2017) has succinctly outlined the history of the development of the PHWR technology and the near-term strategy of the growth of nuclear power capacity. The evolution of the PHWR technology and the upgradation of their safety features have been covered in a series of scientific papers published in a special section of the April ‘17 Issue of “Nuclear Engineering and Radiation Science’- a journal published by American Society of Mechanical Engineers.

The PHWR technology in India started in the late nineteen sixties with the construction of the first 220 MWe reactor, Rajasthan Atomic Power Station, RAPS-1 with a design similar with that of the Douglas Point reactor in Canada under the joint Indo-Canadian nuclear co-operation. Canada supplied all main equipment for this first unit. India retained responsibility for construction, installation and commissioning activities. For the second unit (RAPS-2), import content was reduced considerably and indigenization was taken up for major pieces of equipment. Following the complete withdrawal of the Canadian support in 1974 after Pokhran-1, Indian nuclear engineers completed the construction and the plant was made operational with majority of the components made in India. From the third PHWR unit (Madras Atomic Power Station, MAPS-1) onwards, the evolution and indigenisation of the design began with the objective of keeping abreast with evolutionary changes taking place worldwide and of meeting new safety criteria. Improvements were also incorporated for reduction of the construction time and cost, and enhancing reliability of operation leading to better capacity factors. The first two units of PHWR using indigenously developed standardized 220 MWe design were set up at the Narora Atomic Power Station (NAPS). This standardized and optimised design had several new safety systems which have been incorporated in five more twin-unit atomic power stations with capacity of 2 x 220 MWe located at Kakrapar, Kaiga and Rawatbhata. For realising the economics of scale, the design of 540 MWe PHWR was developed and two such units were constructed at Tarapur. Further optimisations were carried out by utilising the excess thermal margins and improve the economics and NPCIL modified the 540 MWe PHWR design to that of 700 MWe capacity without much design changes. Four units of this design are being constructed at Rawatbhata and Kakrapar at present.

As far as the safety is concerned, the PHWR technology scores well in terms of its several inherent safety features. The biggest advantage of the PHWR design is the use of thin walled pressure tubes instead of large pressure vessels used in pressure vessel type reactors. This results in a distribution of pressure boundaries to large number of small diameter pressure tubes. The consequence of an accidental rupture of the pressure boundary in such a design will have a much less severity than that in a pressure vessel type reactor. The PHWR core is always uniquely surrounded by huge quantity of low temperature and low pressure water in the calandria vessel and in the calandria vault. These coolant inventories significantly delay the progression of the event and, thereby, provide adequate time for interventions and corrective actions by operators to mitigate the consequences. In fact, the large quantity of vault water can serve as a core catcher for in-vessel retention of disintegrated fuel debris in the case of a very low probability core melt accident. These inherent heat sinks are required only when the primary heat sink through steam generators or the shutdown cooling system becomes unavailable in the most severe accident scenario.

In addition, the Indian 700 MWe PHWR design has enhanced safety through dedicated Passive Decay Heat Removal System which has the capability of removing decay heat from core without requiring any operator actions similar with the technology adopted for Generation III+ plants to address the Fukushima type accident. The 700 MWe Indian PHWR has steel-lined containment to reduce the leakages and containment spray system to reduce the containment pressure in case of a loss of coolant accident and for scrubbing radio nuclides in case of their release beyond the design limit.

The main reasons for selecting PHWRs in the 1960s for the First Stage of the Indian nuclear power programme have been the use of natural uranium oxide as the fuel, the best utilisation of mined uranium in energy production and the prospect of establishing a completely self-reliant technology. Over four decades of relentless research, design and development work in Bhabha Atomic Research Centre and Nuclear Power Corporation and the matching contributions of some of their industry partners who had shown the courage in taking up the challenging manufacturing and construction work have enabled India in establishing the technology in totality. Mastering the entire fuel cycle including prospecting of minerals, mining, processing and manufacturing of fuel and structural materials, reprocessing of spent nuclear fuel and immobilization of radioactive waste has given India a unique position of self-reliance in the atomic energy domain. The constraint of a limited reserve of uranium in the country which earlier impeded a rapid growth in nuclear power has now been eased by augmented production of indigenous uranium and import of uranium under the civil nuclear co-operation agreements with several countries. During the last financial-year Nuclear Fuel Complex had a record production of nuclear fuel exceeding 1500 tonne and new uranium deposits discovered by Atomic Mineral Division for Exploration and research have taken the uranium reserve in the country to a level of 200000 tonne.

India is now poised for a rapid growth in the nuclear power capacity which is essential for meeting the demand of clean electricity. The per-capita electricity consumption in India (now close to 1000 KWh) is nearly one-third of the world average and there is an obvious need for a substantial enhancement of non-carbon electricity production to improve the quality of life of our people. The impressive growth in the solar and wind power has made a visible impact in increased availability of electricity in many areas. However, it needs to be emphasized that the distributed and intermittent sources of energy such as solar and wind cannot meet the base load demand very effectively. The nuclear energy source is concentrated, continuous and reliable and, therefore, can be complemented by solar and wind energy in meeting the overall demand of electricity with practically zero carbon foot-print. While the huge electricity demand from large cities and industrial complexes require uninterrupted and concentrated form of energy, there is an equally big demand of distributed energy in our rural areas. Energy planners are, therefore, combining these different patterns of energy requirement to achieve an optimised solution.   

The next issue which needs to be addressed is the speed at which we can grow our nuclear power capacity. In this context one can examine the experience of France and USA in nineteen seventies and of China in the recent years. They all have achieved very impressive rapid growth by adopting a convoy or a serial mode of installation of nuclear power plants of a few standardised designs. In such a strategy, the industry can gear up their dedicated production lines for sophisticated nuclear components and construction companies can deploy their manpower and skill-set most effectively. The decision that 10 PHWRs of 700 MWe will be installed in the immediate future will generate enough enthusiasm in the industry for taking up the challenge of serial production of nuclear components of exacting specifications. The expansion in nuclear power activity will not only broaden the supplier base but also make the participating industry more quality conscious. They can even qualify to be exporters of nuclear grade components. A reduction in the gestation period of construction of nuclear plants will have a strong impact in reducing the cost of electricity.

As has been mentioned by Dr.Srinivasan, India is now in a position to embark upon building 900 MWe Pressurised Water Reactors (PWRs) of her own design. The capability of making large size pressure vessel is now available within the country and our own isotope enrichment plants will be able to supply a part of the required enriched uranium fuel within a decade. These will be in addition to imported PWRs from Russia, France and USA with the aim of an accelerated growth of nuclear energy in the country. The signing of the recent agreement between India and Russia for the construction of two more 1000 MWe PWRs (Units 5 and 6) in Kudankulam confirms this overall plan. The convenience of operation and a high average capacity factor have made PWRs the most sought after nuclear power reactors in the world, nearly 85% of all power reactors being the PWR type.  There will be a special advantage of operating a mix of PWRs and PHWRs in India as the spent fuel of the former which will contain more than 1% of uranium-235 can be reprocessed and further utilized as the fuel in PHWRs operating in tandem. This evolving fuel cycle will eventually extend the power generation from the First Stage of the well- known three stage programme quite significantly.

The merit of the closed fuel cycle which has been adopted right from the beginning of the Indian programme is not only in multiplying the fuel resource but also in reducing the radio-active burden of the nuclear waste dramatically. In this context, the successful development of separation of minor actinides from the nuclear waste in India, deployed in pilot plant scale, has drawn world-wide attention. Plutonium recovered by reprocessing of spent fuel from operating PHWRs has been used in making the plutonium-uranium mixed oxide fuel for the full core of the Prototype Fast Breeder Reactor (PFBR) which has initiated the commissioning activities before commencing operation. With the entry of India in her Second Stage of nuclear power programme in which Fast Breeder Reactors will not only enable the growth of the installed nuclear capacity, but also generate more fissile materials, plutonium-239 and uranium-233 by conversion of fertile isotopes, uranium-238 and thorium-232 respectively. An enhanced scope and an accelerated implementation of the First Stage of the programme will make a far- reaching impact on securing the energy self-reliance of the country. By operating multiple recycles in the uranium-plutonium fuel cycle the supply of fissile material is expected to be enhanced by a factor of 60 and by using the huge reserve of thorium, the current estimate being four times that of uranium, India can sustain the supply of clean nuclear energy for several centuries.

Dr Srikumar Banerjee is a former Chairman AEC & Secretary DAE. Currently he is Homi Bhabha Chair Professor, DAE; Chancellor, Homi Bhabha National Institute (HBNI) and Chancellor Kashmir University.

P.N. Bhagwati's legacy: a controversial inheritance

P.N. Bhagwati's legacy: a controversial inheritance

P.N. Bhagwati was India’s most influential judge — it’s time his legacy is revisited

Justice P.N. Bhagwati, who died recently, at 95, is perhaps the most influential judge independent India has had. What Indira Gandhi is to Indian politics, Justice Bhagwati is to the Indian judiciary: their legacies have endured, having engineered a populist democratisation based on radical rhetoric, but at very heavy costs to the institutions themselves.

One can see strong resonances of Mrs Gandhi’s style in the Modi government’s mode of functioning in their all or nothing friend or enemy view of politics, with complete disregard for the autonomy of institutions. Similarly, with contemporary standards of judicial behaviour, pronouncements pandering to the lowest common denominator — calling for the cow to be declared the national animal, imposing the national anthem on cinema-goers and imposing thoughtless prohibition near national highways — while simultaneously displaying pusillanimity in institutionally vital cases against the Central government such as Aadhaar, the Money Bill and the Delhi government cases. The very condition of possibility of such playing fast and loose with the law are Justice Bhagwati’s landmark interventions.

Charting a way to power

Just as nationalism has now emerged as the currency of contemporary judicial populism, socialist rhetoric was his path to power. He was appointed to the Supreme Court in 1973 at the height of Mrs Gandhi’s ideological onslaught on the judiciary, with her call for a ‘committed judiciary’. The Kesavananda Bharati judgment had recently been delivered, in which the Supreme Court had dared to stand up to Mrs Gandhi and had declared the Constitution’s basic structure as un-amendable even by her brute parliamentary majority. In the aftermath of this judgment she superseded the three senior-most majority judges leading to their resignations, and appointed Bhagwati and Krishna Iyer to the Supreme Court.

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A unique blend of judicial virtues

Two key points deployed in Mrs Gandhi’s mid-1970s attack on the judiciary were the inaccessibility of the legal system and its alien British form. The responses were also twofold: the expansion of legal aid and the injection of indigeneity in legal institutions, respectively. Legal aid was even declared part of the Emergency’s flagship Twenty Point Programme. The two recent judicial appointees, Justices Krishna Iyer and Bhagwati, enthusiastically responded and penned successive reports proposing ‘nyaya panchayats’ as the silver bullet solution to both the problems. The challenge of democratising access to courts could have been met through an expansion of legal aid. Instead the solution was seen as creating parallel informal institutions, diluting judicial procedure by short-circuiting basic principles of adjudication. These visions of paternalistic deprofessionalised indigenous justice provided the basis for future developments such as Lok Adalats at the lowest level, tribunalisation at the intermediate level and Public Interest Litigation (PIL) at the highest level of the judiciary. For the part they played in this process, Professor Upendra Baxi later wrote that the two judges “remain vulnerable to the charge of acts as legitimators of the emergency regime”.

Moving to extremes

Justice Bhagwati soon proved his loyalty to the Emergency regime much more directly: as part of the majority in ADM Jabalpur vs Shivkant Shukla, which upheld the constitutionality of the draconian Maintenance of Internal Security Act (MISA), and declared that even the right to habeas corpus would not survive during the Emergency. Justice Bhagwati was justly targeted for his role during the Emergency after the 1977 elections. He soon moved to the other extreme, and proved his loyalty to the Janata government by upholding its use of Article 356 against Congress-led Legislative Assemblies, a decision with disastrous consequences for Indian federalism. He did another somersault after Mrs Gandhi returned to power in 1980. He was the only judge in the Minerva Mills case to uphold her Emergency era amendment immunising any statute implementing a directive principle from judicial review for violating Articles 14 and 19, thus giving primacy to directive principles over fundamental rights. Accordingly, a statute implementing prohibition, or prohibiting cow slaughter, or introducing uniform civil code, or pursuing ‘socialism’ would be immune to judicial challenge for violating the rights to equality and freedom. If this sounds rather familiar, it is because the Indian judiciary has implicitly followed the logic of Justice Bhagwati’s dissenting opinion in recent years. In the Judges’ Transfer case, he went on to explicitly support the appointment of judges based on their ideological predilections, i.e., court packing for a ‘committed judiciary’. When the constitutionality of the National Security Act, 1980, Mrs Gandhi’s successor statute to MISA, was challenged, he got another chance to somewhat undo the notoriety of the Habeas Corpus case, but he upheld this law as well. In spite of such an appalling record on civil liberties and such open servility to regimes in power, how did Justice Bhagwati acquire such a heroic reputation?

Behind the PIL

Much of Justice Bhagwati’s fame rests on his role in pioneering the PIL. In fact, PIL letter petitions would initially be personally addressed to him, rather than the court. This enabled him to sidestep the then Chief Justice’s role in allocating cases, also leading to allegations of soliciting petitions. More enduringly, instead of grounding the PIL in rules and principles, his view of legal procedure as the enemy of justice meant that all aspects of procedure in PIL cases were diluted, removing all checks on judicial arbitrariness and making it a juggernaut annihilating all procedure. The dilution of locus standi could have been grounded in some notion of ‘representation standing’. In its absence, most PILs are filed by citizens unconnected to any issue. In the Bandhua Mukti Morcha case, he diluted evidentiary standards in PIL cases to an extent that proved catastrophic in the long run. He also was the first judge to openly legislate in a PIL relating to inter-country adoptions, creating another dangerous precedent.

Justice Bhagwati is also famous for his judicial improvisations. Based on the idea that ‘arbitrariness is the antithesis of inequality’, he introduced a new test to examine violations of ‘Right to Equality’. This test is however completely illogical, as constitutional scholar H.M. Seervai demonstrated. Even more famous is his pioneering ‘right to life jurisprudence’ in the Maneka Gandhi case. A negative right against the state’s illegal deprivation of any individual’s life or personal liberty has since been interpreted as a positive right to life, making it a receptacle for all manner of socio-economic rights. The only right it now seems to exclude is the literal mandate of Article 21. Another instance of careless improvisation is his unnecessary innovation of ‘absolute liability’ as a principle of liability in cases of injury caused by inherently hazardous industries. Needlessly trying to remove the few exceptions that the time-honoured principle of strict liability allowed, once again Justice Bhagwati was set on winning the tournament of competitive radicalism that his vision of judgeship entailed, regardless of institutional costs. This has been his most enduring legacy as a role model for future judges: to think of their judicial role instrumentally as social activists and not mere jurists. A certain looseness of legal language entered Indian appellate judgments and radical rhetoric became the path to power for Indian judges. The value of careful judicial prose declined as fidelity to law no longer mattered, what mattered was the show of ideological commitment.

Justice Bhagwati’s legacy lives on. But it is high time we revisit it.

DBT से तीन साल में बचाए 57,029 करोड़

DBT से तीन साल में बचाए 57,029 करोड़

पिछली यूपीए सरकार की तरफ से शुरू की गई महात्मा गांधी राष्ट्रीय ग्रामीण रोजगार गारंटी योजना (मनरेगा) के जरिये नरेंद्र मोदी सरकार को सब्सिडी मद में सबसे ज्यादा बचत हो रही है। मोदी सरकार ने आधार के इस्तेमाल और डायरेक्ट बेनिफिट ट्रांसफर (डीबीटी) के इस्तेमाल के जरिये इस योजना के 1 करोड़ फर्जी लाभार्थियों को हटाकर इसे और बेहतर बनाया है।

मोदी सरकार ने दावा किया है कि उसने पिछले वित्त वर्ष में कई योजनाओं में डीबीटी के जरिये सब्सिडी मद में तकरीबन 20,000 करोड़ रुपये की बचत की। साथ ही, केंद्र सरकार ने 2014 से लेकर मार्च 2017 तक डीबीटी के जरिये कुल 57,029 करोड़ के बचत का आंकड़ा पेश किया है।

सरकारी आंकड़ों के मुताबिक, पिछले वित्त वर्ष में लीकेज को रोककर बचत के मामले में यूपीए की तरफ से शुरू की गई स्कीम मनरेगा टॉप पर रही। इससे पहले के वर्षों में सरकार को एलपीजी पहल स्कीम से सबसे ज्यादा बचत हुई। सरकार का दावा है कि उसने 2016-17 में मनरेगा के लिए डीबीटी भुगतान से 8,741 करो़ड़ रुपये की बचत की, जबकि पहल के जरिये बचत की राशि 8,185 करोड़ रुपये रही। एक सीनियर सरकारी अधिकारी ने बताया कि इसकी वजह मनरेगा खातों का रिकॉर्ड संख्या में आधार से लिंक कराया जाना है, जिससे एक करोड़ फर्जी जॉब कार्ड खत्म किए जा सके।

मनरेगा के तहत जॉब कार्ड्स की कुल संख्या 13 करोड़ थी, जो 2016-17 में घटकर अब 12 करोड़ हो गई है। सरकार ने अभियान चलाकर पिछले एक साल में इस स्कीम से जुड़ी गड़बड़ियों को खत्म किया है। एक सीनियर सरकारी अधिकारी ने बताया, 'यह दिलचस्प है कि यूपीए की सब्सिडी स्कीम सरकार के लिए सबसे ज्यादा बचत ला रही है। हमने 85 फीसदी मनरेगा खातों को आधार से लिंक किया है।'

सरकार के मुताबिक, 2014 से अब तक मनरेगा के तहत कुल बचत अब 11,741 करोड़ रुपये है। मोदी सरकार के सत्ता संभालने के बाद से सबसे ज्यादा बचत पहल स्कीम के तहत एलपीजी सब्सिडी के डायरेक्ट ट्रांसफर के तहत हुई है, जिसे मोदी सरकार ने 2014 में लॉन्च किया था। सरकार का दावा है कि इस स्कीम के तहत अब तक कुल बचत 26,769 करोड़ रुपये है। कंट्रोलर ऐंड ऑडिटर जनरल ऑफ इंडिया (सीएजी) ने इन आंकड़ों को बढ़ा-चढ़ाकर पेश किया गया बताया था, जिसके बाद सरकार के इन दावों को लेकर आलोचना भी हुई थी।

सरकार का दावा है कि वह एलपीजी सब्सिडी के 3.11 करोड़ फर्जी लाभार्थियों की पहचान करने में सफल रही है, जिनकी इस बाबत सब्सिडी या तो ब्लॉकर कर दी गई या ऐसे कस्टमर इनऐक्टिव हो गए। हालांकि, कंट्रोलर जनरल ऑफ इंडिया ने कहा कि सरकार ने यह माना कि ऐसे हर कस्टमर सालाना 12 सब्सिडी वाले सिलेंडर लेते, जबकि राष्ट्रीय स्तर पर ऐसे सिलेंडर्स की प्रति व्यक्ति सालाना खपत महज 6 है। हालांकि, सरकार अपने दावे पर कायम रही।

NPA resolution: well begun but half done

The initiation of the NPA resolution process has brought in a certain degree of rigour, but it still lacks the credibility to be called a bold initiative

NPA resolution: well begun but half done

The initiation of the NPA resolution process has brought in a certain degree of rigour, but it still lacks the credibility to be called a bold initiative

The Reserve Bank of India (RBI) has set the ball rolling for resolution of non-performing assets (NPAs) with the shortlisting of 12 big defaulters. These will now be processed further by the banks before being admitted by the National Company Law Tribunal (NCLT) for further processing of insolvency resolution as per the Insolvency and Bankruptcy Code, 2016. This is a step in the right direction. The 12 borrowers comprise a significant part of the NPAs in the banking system, and therefore need to be handled with the importance that these deserve. The pace and extent of resolution of these assets would also act as an important signal for the remaining NPAs as well as for future delinquencies.

So what is the next step in the process? The question being asked by most observers and faced by creditors is this: Will the current steps being taken by the government and the RBI, as per the insolvency resolution process, help in any meaningful recovery of dues? In order to answer this question, it is important to understand the next steps in the process. The creditors will need to appoint an insolvency professional (IP), and form a committee of creditors. This will be followed by negotiations between the stakeholders, primarily the creditors and the debtors, to arrive at a common approach for resolution within 180 days (extendable to 270 days). If the parties are not able to arrive at a solution, the borrower will be referred for liquidation. The liquidation will practically mean the auction of the assets of the borrower to pay off the dues to the creditors. Let us assume that the process moves smoothly till the stage of auction of the assets. This is a fairly uncertain assumption in view of the untested process and potential legal hurdles. Nevertheless, at this stage, the creditors need to move ahead and give their best shot, as per the process of insolvency resolution. It is interesting to note here that while in theory the auction of NPAs is supposed to be the last resort for resolving the issue, in practice it is expected to be the most likely option.

When the assets are put up for auction, bidders will be expected to bid for these. But then the big question still remains—who will buy these assets and at what prices? A defaulting asset, by definition, means that the equity has zero value. So, why should any buyer pay any money for such assets? These assets in the power, roads or steel sectors cannot be said to command any brand value or any such off balance sheet value. The negotiations have to focus therefore on how much of a haircut on the credit will be accepted by the creditors so as to make the transaction viable for the buyer of the asset. Based on the amount of haircut in the credit amount, the return on investments to be made for the buyer will need to be at a respectable level.

One side of the equation is simple to understand. The amount of haircut taken by the creditors will directly translate to an accurate measurement of losses for the creditors. But it is the other side of the equation which is prone to a wide range of outcomes based on the underlying range of assumptions and potential scenarios. The computation of the expected future cash flows on an Excel sheet is one thing and putting one’s cash to work, based on the highly uncertain assumptions, quite another. For instance, the view of the buyer will be influenced by the buyer’s views on the markets, policies, regulations, political scenario, to name just a few high-level factors. It is interesting to note that if one assesses the correlation (or even causality) of most of these risk factors with the intent or commitment of the government to resolve the issue, it should turn out to be quite high. The buyer will seek appropriate compensation for the expected potential losses as well as unexpected losses to arrive at a desired rate of return at a given level of certainty.

In other words, even as the process of insolvency resolution for the so-called flagship cases has been initiated, observers must be wondering how the elephant in the room has been consciously missed till now. And that is the explicit commitment from the government in terms of policy certainty, capital support (direct or indirect), and political will. Unless this aspect is addressed directly and squarely, we are likely to face the apathy of potential buyers when we get to the final lap of the resolution process. It is also understood that in an ideal scenario, the government should not be a part of the resolution process involving private parties. However, the current scenario is far from allowing a market-oriented solution. There are too many issues of concern emanating from government policies, imperfect or absent markets, contractual issues and macroeconomic pay-offs, and the same affect a robust price discovery of NPAs.

As they say, you can lead a horse to water, but cannot force it to drink. The initiation of the NPA resolution process has brought in a certain degree of rigour, but it still lacks the credibility to be called a bold or successful initiative. The banks are taking the required actions to the extent of their respective abilities and governing atmosphere. The RBI is doing its best, and even stepping into executive functions like scrutinizing NPA accounts and issuing directives to banks. However, the government has not yet stepped up to the requirements. It should evaluate the bottlenecks within its domain and bring in the appropriate enablers to help resolve the NPAs at the earliest.

Setting up the defence industrial ecosystem

Much will depend on how the government’s ‘strategic partnership’ model plays out on the ground\

Setting up the defence industrial ecosystem

Much will depend on how the government’s ‘strategic partnership’ model plays out on the ground

Last week was an interesting one for Indian defence manufacturing. On Monday, Tata Advanced Systems Ltd and US plane-maker Lockheed Martin Corp. signed an agreement at the Paris Air Show to produce F-16 fighter jets in India. On Tuesday, in Delhi, Reliance Defence entered into a strategic partnership with Serbia’s Yugoimport for ammunition manufacturing in India. On Wednesday, back in Paris, Reliance Defence joined hands with France’s Thales to set up a joint venture that will develop Indian capabilities in radars and high-tech airborne electronics.

In Moscow, on Friday, defence minister Arun Jaitley and his Russian counterpart signed off on a road map for strengthening bilateral military ties. Meanwhile, at home in India, the army rejected, for the second year in a row, an indigenously-built assault rifle after it failed field tests—a pointed reminder of how the country’s sub-par defence industry continues to damage the military’s operational preparedness.

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For the most part, India has sought to make up for that failing at home with imports from abroad. Between 2012 and 2016, India was the world’s largest importer of major arms, accounting for 13% of the global total and increasing its arms imports by 43% from the 2007-11 period, according to the Stockholm International Peace Research Institute (Sipri).

That being said, in recent years there has been a greater focus on developing indigenous capabilities through technology transfers and joint production projects with international partners. The Narendra Modi government has also put defence at the core of its flagship domestic manufacturing programme, Make in India. It has opened up the still largely state-run sector to private players and foreign firms in an effort to build a “defence industrial ecosystem” that will not only support the country’s military requirements but also emerge as an important economic lever—generating exports, creating jobs, and spurring innovation.

The target is to source about 70% of India’s military needs from domestic sources by 2020. This is an ambitious plan—that’s approximately how much India imports at the moment—but it is one that has been in the works for quite some time now. Notably, the defence manufacturing industry has been open to the private sector for well over a decade, and several foreign firms are involved in the joint production of weapons systems in India.

Yet the defence industrial ecosystem hasn’t quite taken off. The Indian military is still heavily reliant on foreign imports and state-owned defence firms are still the dominant force in the market. Private firms, though growing in number, have struggled to find their feet. It is too early to say if the incumbent administration’s efforts will bring better results, but much will depend on how its “strategic partnership” model, released late May, plays out on the ground.

Conceptualized by the Dhirendra Singh committee in 2015, this model has the defence ministry identifying a few Indian private companies as strategic partners (SPs) to tie up with a few foreign original equipment manufacturers to produce some big-ticket military platforms. In the process, the SPs are expected to help catalyse the country’s defence industrial ecosystem. This has already led to some concern about the ministry of defence (MoD), often criticized for not offering a level playing field to the private sector, picking favourites.

As Laxman Behera from the Institute for Defence Studies and Analyses (Idsa) notes, “Time and again, the MoD has deviated from its own promise of fair play in award of contracts and handed over large orders to DPSUs (defence public sector undertakings) and OFs (ordnance factories) on nomination”.

Moreover, the MoD also prohibits its strategic partners from working in more than one segment. This is supposed to ensure that the SPs keep their focus but, as Richard Heald at the UK India Business Council points out, this “ring-fencing of six strategic platforms” is problematic because “many of the six named domestic champions have already invested in defence verticals that may be different from those they are selected to focus on. Then, questions are being raised as to whether mechanisms will be put in place to achieve ‘value for money’ once the sector has been awarded to a strategic partner on an exclusive basis”.

Yet another issue is that of how small and medium-scale enterprises (SMEs) will respond to this model. SMEs are crucial to building a vibrant and robust ecosystem. In particular, they do a much better job of absorbing, developing and commercializing niche technology, which is key in the defence sector. But while the government acknowledges their role and importance, it is unclear if its policy supports that vision.

Outside of policy design, the biggest challenge to developing India’s defence industry ecosystem is undoubtedly human resource and skill development. The Dhirendra Singh committee report deals with this issue at length, noting that “India at present does not have a structured framework and a robust system to prepare its human resources to address all issues connected with building and sustaining defence systems”. The report recommends several measures to bridge this skills gap—from changes to academic curriculum to setting up institutions that specialize in defence and security to raising a new generation of system integration managers. The government must consider these carefully.

How do you think India can build its defence industrial ecosystem?